CPA Board Audits Find Problems with Controls

For the audits of fiscal years 2014 and 2015, auditors identified problems at the State Board of Certified Public Accountants, the entity responsible for licensing and regulating CPAs in Louisiana.

Auditors found that in fiscal year 2014, the employee payroll was processed before time sheets were due, which did not allow enough time for management to review time entry and leave balances. In one case, an employee was paid for 24 hours of leave without pay, which was not recouped until three months later.

Employee records also showed negative leave balances, including one employee who had a negative balance for four consecutive pay periods but who was allowed to take leave. In addition, employee leave records did not match time sheet postings for two employees over multiple pay periods.

Auditors noted a similar finding in their report for fiscal year 2015. The 2015 audit also found that between January and March 2015, the Board did not have adequate segregation of duties over its financial operations. Specifically, the Executive Director prepared checks, approved disbursements without a formal process requiring purchase orders and/or requisitions, signed checks under $2,500, input disbursements into the general ledger, and maintained control over bank statements.

The Board also did not comply with the Louisiana Licensing Agency Budget Act in fiscal year 2015 because it did not submit its annual comprehensive budget to the appropriate entities until notified by auditors.

In its response, the Board’s management said it was looking at ways to help ensure adequate controls are in place to maintain error-free payroll and leave records. Management officials also said the failure to submit the Board’s budget in a timely manner was an oversight and should not happen again.